thanks to my guest roger stone check out the book the man who killed kennedy the case against l.b.j. also thanks to my earlier guest scott rice on his book the power of citizenship why john f. kennedy matters to a new generation that's out now to remember you can find me on twitter at kings things see you next time. well. it's technology innovation all the developments from around russia we've got the future of covered.

hello there i'm marinated this is boom bust and here are the stories we're tracking for you today. first up where have all the banks gone well according to statistics from the f.d.i.c the way the dinosaur will tell you about it coming right up and also a columnist and former treasury secretary paul fred roberts joins me today to discuss all things bad policy related and later on madonna hers is and i discussed high net worth practice of her diction shopping her story it's in today's big deal you won't want to miss any of it and it all starts right now.

they're our lead story today detroit now the insolvency can now proceed with bankruptcy after a judge ruled on tuesday that the city is eligible to file making detroit the largest missile bankruptcy in u.s. history now u.s. bankruptcy judge steven rhodes read the ninety minute report from his one hundred forty page ruling before issuing the court's decision in his ruling he listed the city's. a litany of financial woes including the loss of manufacturing jobs and population in recent decades now the long awaited decision sets up a bitter battle between the city's financial officials and its unions creditors and

retirees who are expecting deep cuts in pensions as part of the chapter nine process sales of treasured city assets such as its art collection will be up for auction. elsewhere the overall number of banking institutions in the u.s. has dwindled to the lowest levels since the great depression low interest rates a sluggish economy and heightened regulations have all taken their toll on the banking sector now the decline in banking numbers has come entirely in the form of big exiting banks with less than one hundred million dollars in assets left on their books and the bulk of those departures occurred between one thousand nine hundred four and two thousand and eleven now f.d.i.c data shows that more than ten thousand banks left the industry during this period as the result of mergers and consolidations while about seventeen percent of the banks collapse all together now the number of federally insured institutions nationwide shrank to six thousand eight hundred ninety one in the third quarter now that's falling below the seven thousand number that it was for the first time since the federal regulation began

keeping track in one nine hundred thirty four it's a long time now the number of physical bank branches in the u.s. is also shrinking from the end of two thousand and nine through june thirtieth of this year the total number of branches dropped three point two percent according to a. and move of a big coin there's a new crypto currency on the block and it's slimmer and more supple than ever before welcome light now created by a former google employee an mit graduate charlie levy like cohen was built to correct some a big as minor flaws and can best be described as silver to big coins gold is more abundant than big coin and like coin has grown by over four hundred percent in value since last week alone just last week now while the total market saturation for only ever be twenty one million coins like coin has a fixed point at eighty four million coins now this keeps the price lower than that of decline but it isn't guaranteed against price inflation down the line like corn

is also designed to be to generate more by using computer memory rather than processing power which is what bitcoin uses and this discourages people from the digital arms race to generate. and finally china mobile it's the world's largest wireless carrier and it's taking preorders for the i phone according to fortune's philip de witt this screengrab right here is in i phone preorder now was taken from a website registered as a subsidiary of china mobile in shoes to choose who is a city just west of shanghai and has over five million people living there it's also one of the richest cities in china making i phones more appealing to the market there as well and china mobile has over seven hundred million subscribers it's quite a few. well there you have of those there have lives for today as always we'll be tracking these stories and keeping you posted on all the latest.

joining me now is economist journalist author and former assistant treasury secretary mr paul craig roberts mr roberts how are you doing today i'm just going to you're going to now i want to start off by asking you it was recently announced that timothy geithner former secretary of the treasury and new york fed president he's moving to a lucrative job at private equity firm warburg pincus is this move unexpected to you know of course not. the bank should always take care of those who serve. now during gardner's time at the treasury he went to great lengths to let people know that he was a life long civil servant i have covered during the financial crisis do you think that he ultimately served the interests of the bank more than you know the interests of that would be sort of being a true civil servant or sure of course that's the direction the federal reserve which should be interested. in recent years that's been functioning all the

treasury it's now the function of the financial regulatory. they all. function now since the beginning of the fed itself there's been a revolving door between wall street and the lender of last resort now even paul warburg advocated for the creation of the fed and he was appointed to to its first board by president wilson my question to you how big of a problem is this revolving door and is it something that needs to be prevented. well they wouldn't be able to. that the federal reserve was formed in the war room to sort by x. . the public is often told that it's there to provide full employment moment pleasure and that's just a cover story programs or it was there to make sure that the big banks not all the

banks just a few big banks that nothing really goes wrong for them that substantially and that's what it's been doing ever since. now i want to talk about yellen for a second do you think that recent fed policy has been beneficial to the economy kind of via yellen what's come up with her everything that she's been saying. no i don't think it has been because it's created a moment's wobble and bonds and stocks and it commits the federal reserve to printing new and huge amounts near dollars and the huge amount of money printing alternately has to threaten the value of the doll act people's confidence in ns war reserve currency so i think it's really been detrimental to the economy and certainly been detrimental for savers especially retired people who

don't like to risk their life savings and stock market because they don't know they'll live long enough to see a recovery should the market correct and they are dependent on interest income they've got no interest and come down for a number of years so we follow suit that does not serve in american people or the economy it serves the banks that are too big to fail or the whole purpose of the policy is to keep the prices of the debt related securities or derivatives that debt related to room to. explore high when you buy bonds all debt crisis rise with the treasurer's and they've got a mortgage backed securities this takes some of the toxic assets away from the big banks and it's that it supports the balance sheets of the banks and makes them look

a lot more solvent so that's the real purpose of the policy. now i kind of begs the question is the fed itself experiencing diminishing returns with its ongoing q.e. program and so it sounds like you might actually might think yes. well yes i think that the fed can get out of. their own way that if they stop it then we know bond prices will fall interest rates will rise and stock prices will collapse and there are natural crisis and the banks the big firings that they say that are too big to fail they would be in trouble again so the fed is kind of locked in to this policy and really will have to contain or i think it will contain here until something happens to the dollar. because they keep turning more dollars more dollars so if you're someone holding daal of denominated assets you're watching

your dollar holdings be diluted at the tune of a thousand million a year so it's. the world they move away from you know they're already starting to move away from using the doll it's the. currency for settling trade imbalances. the chinese currency has now moved up to number second but of course the dollar is still the major currency choose to settle on a national trade accounts at some point if the demand for the dollar and that role . climb substantially this can break the fed's control or bring the whole thing to a yeah now you said that right now is that something happening to the dollar what do you think that something will be. well i think it's what we see happening you

know the chinese announced recently that they do not need to accumulate any more foreign currency reserves which they made dolls so that's an indication that they see us to recycle their trade surpluses with the united states into the purchase treasury debt so that means if they stop doing that that the federal reserve to keep the bottom priced society will have to buy more bottoms. and we say that china has an agreement japan and australia to settle their trade imbalances in their own currency so that new single ball and we have the brics russia china brazil india south africa making a similar agreement that they will settle their trade imbalances between themselves in their own currencies so this means that the demand for doll as

a as the world currency as a means of payment fog's and so in the current in market that should mean that the dollar's exchange rate falls relative to all the currencies. when all these mechanisms are already in place and while the use i would expect to see a lot of trouble for the value of the doll now that since united states is such an important kind of country. it means all that imports of things coming into the country which would then cost more so the inflation would be imported into the country strongly in dollars loss of exchange value and so then the american people would be faced with an all or relatively high level of unemployment that they're experiencing and inflation and there's no real economic policy solution for that. now mr roberts i have to go to a quick break but please stick around because after the break we will continue our discussion on q.

effed policy or lack thereof and everything else that we could talk about with here also rachel kearns is joins me in today's big deal to talk about jurisdiction shopping just in time for the holidays and as we head to a quick break here's a look at some of today's closing numbers.

crosstalk rules in effect that means you can jump in anytime you want. i was a new alert innovation scripts scare me a little bit. there is breaking news tonight and we are continuing to follow the breaking news. alexander's family cry tears

of the war and it great things rather that there has to be adequate rigor at the core of what is round. is a story sort of movie is playing out in real life. welcome back now economist author and all around bad insider paul craig roberts is with me now we're continuing our discussion now mr roberts i want to start off this this section by talking about former fed official andrew who is our now he published an op ed in the wall street journal and in his piece he claimed that the true purpose of q.e. was to support the banks i want to ask you is there a way to conduct monetary policy without benefiting the banks or is this just in an

editable outcome of conducting monetary policy. well yes you could conduct amount to policy with the benefit of the country in mind with the stability every want a. job and all but that's not what the thread was created do it was created by the big banks to serve them they have control over sense so what and to use our says is exactly what i've been saying it's just that it was the insider who originally implemented the policy quantitative easing and when he saw what it was really for was to support the banks he resigned and that's very rare it shows that is all principle so i don't think that without some kind of a revolution. that the power of the banks all over the fed could be

broken i think it will genuine the bikes right now it seems that the current fed policy that encourages private debt by keeping interest rates so low and for such a long period of times does it bad policy shifting the power structure here in the us kind of giving more power to the banks in some way. well the financial crisis and the response to it has given a lot more power to the banks because of the consolidation is the new order we get in this program. they let the small banks fail big banks pile. so big banks get bigger and bigger and bigger and there's no longer an antitrust act and the argument used to be that competition requirement. that you didn't terms get too large to get too big of

a share of the market that they had to be able to compete against each other but now what they said is no you can't compete with global economy unless the banks are here. almost like office so i don't you know i just don't see how all. the response to the one hundred crisis has done anything except benefit byron's. now larry summers who recently implied during an i.m.f. gathering that it's not enough to merely give big banks interest free money more should be done for the banks and summers suggested instead of being paid interest on bank deposits people should be penalized for keeping their money in banks instead of spending it now i want to this for a long time and you would know if that's possible or not why doesn't the fed somehow come up with a scheme where it charges the banks to spend less and opposed to the banks charging people to spend. well but some has this really concocting is an excuse

not only to continue or quantitative easing but to increase the sierra and the only way you could have you could get negative interest rates would be if the federal reserve purchased so many bods that it was paying a premium for the ball and over its face value or. in other words suppose it's one hundred all. by the fed it drives up the prices to one hundred two so it pays more for the ball and then the bond would ever be worth that maturity that's why you drive down the interest rates and the only and only known way that i that i can come up with so what or what this schema lera songs is a former u.s. treasury secretary and the bomber regime was the scheme is to provide an a policy or even for the federal reserve to purchase more all its

facts somebody melbourne's that they're buying them at a premium over their face value now that would give you a negative interest rate so what would the people do they would take their money out of the banks and. and do something else so the next part of the scheme is all well we don't let people have cashed in will there's only digital money and that way they can keep their money at home they can only keep it in bank accounts and they are we can pin the last one for safety you see the change in economic policy that dominated the united states into the supply siders came along in the 1980's while said that there's a natural right. of interest and that natural rate is the rate that makes savings in investment equal at full employment and what summers is saying is that now

the natural rate of interest is negative. wow well if this is an argument for the federal reserve to buy more bombs and to be such a huge demand in the bond market they'd pay premiums over the face on it so it looks like summers thinks that quantitative easing must contender must increase and that he has concocted an economic policy argument to justify that that's what that's all about environment and now i want to ask you about savings the personal savings rate in the us today is currently two percentage points below the average long term how of the savings rate change under negative interest rate policy can you explain that. well and you know summers argument which

was very well explained by paul through them. they actually fail that people are saving more than investors are investing and therefore saving comes a dilution from spending so that consumers are spending money but if they would just spend everything everything would be fine but they're saving so and so the part they're saving comes away from spending well if the investors don't step in and borrow that saving and put it all back into the economy then the spending stream has shrunk and employment rises so this is the whole change that view and so we associate with john maynard keynes it goes back to before. the second world war so what with with this view savings is bad.

because it's reduction from spending and what's good is more spent more the better and so i think. in my home and this argument some crude maybe it's really. a closer for the continuation and increase of quantitative easing they want to support the banks even stronger. mr roberts that's all the time we have now but as always thank you for your insight and please come back on the show very soon i can ask you a million more questions so after in the near future that was called credit roberts economist and former assistant secretary to the treasury for economic policy under reagan time now for today's big deal.

rachel curteous is joining me now during the show to talk about a new shopping trend this year shopping trying to check this out and it's actually specifically for high net worth individuals. and get a christmas shopping my we suggest for you high net worth jurisdiction shopping yeah that's right now if you're part of that high net worth you might want to join the growing number of wealthy folks taking advantage of more favorable tax nations now according to a u.b.s. and well fed ex billionaire senses paul billionaire such as singapore switzerland and hong kong have emerged as favored destinations for the ultra rich due to factors like quality of life good education and low taxes now in these third countries their billionaire populations grew up locally by only thirty six thirty four and twenty five percent respectively and the rest they came from afar now rachel i turn to you let's talk about this growing trend do you think it's fair let

alone you know morally ok if you made your money here in the u.s. and america provided the place for you to make it for you to get up and leave balance to greener tax pastures if you would think that everyone has the right to move where they want and i think it's important we preserve that right but when it comes to the moral question that you ask for people who have benefited from anything in the united states from patent legislation to good roads to solid internet to anything like that certainly would make sense for for them to want to give back to a certain degree but i don't even think the fairness is just from the people who are running around to other countries like it's also for the people like i don't know presidential candidate mitt romney who are putting their money into tax havens so you could stay in the united states. and aspire to the highest office here and still be trying to hide away a lot of your money so to me it's like if you're moving away at least you're admitting like listen i don't want to be this money you know it leo really going to

be consistent and i appreciate consistency above all else. like that now check this out numerous high profile ultra high net worth americans including facebook co-founder i believe is actually a brazilian by brazilian bribe birth but then he sought refuge in the united states so one could argue that he only got his money but i also like bodily integrity here in the united states before skipping out to singapore that we're talking out of border sovereign oh yeah we're talking about of course. related by andrew garfield in the social network for those who don't know it's true fact. also songwriter and social i did nice rich and twenty year old. friend denise rich yes close friend of the clinton i don't like your husband i believe it was hard to have your ex-husband . help with fact you got it all over the place today so it is about getting. another one to oil or she ditched her passport last year as well all of these

people are going to be another all over the place do you think there should be new laws put onto the books to prevent this man. because what with we can't force people to stay in the united states i mean if you're going to put any sort of measure on the books maybe something like a financial transaction tax something that gets money from people before they hit the road but even that i think is really controversial the details that have to be worked out a lot of people are saying we just need to make the tax code less complex and they're right if you look at the tax code it's ridiculous there's no way i could ever do my taxes on my own and i don't really have that many assets so i can't imagine those poor rich people and their accountants what they're having to deal with but you know i do think that when you look at so at a country's tax code you can see their priorities in the same way that a total once said you can understand a country by its prison i think you can understand a country by its tax code and the united states right now as a country that's not really sure. it's priorities are we've just been using all these kind of stopgap measures to our analogy of the year didn't you just hear that is not a big one from rachel herz is here is almost over so i was there and i know i made

you did it i'm always thank you that's all for now but you can see all segments featured in today's show on your but youtube dot com slash boom bust r t we also hearing from you sabrina check out our facebook page at facebook dot com slash boom bust our teeth from all of us here boom bust thank you for watching we'll see you next time.

you're a little more like. ali i just felt like you know. i should have you with us here on our t.v. today i roll researcher.

european diplomats dashed to kiev to meet a crane's government and opposition while the u.s. secretary of state reaches out to support the pro e.u. for testers. we stand with the vast majority of ukrainians who want to see this future for their country meanwhile protests are gathering steam with thousands blocking the presidential administration building. by the fracking police in romania brutally dispersed villagers struggling to resist a u.s. oil company that's exploring for shale gas close to their homes. as the most militias are driven out of the libyan town of dirt with crowds calling on the police and army for greater security as a government.